Second Stimulus May Arrive by Christmas
By ALBERT BOZZO, CNBC.com
(Nov. 5) - Though it's too soon to say whether Christmas will arrive early in the nation's capital, Barack Obama's victory and an expanded majority in Congress could encourage Democrats to make up a list of economic stimulus measures and check it twice.
House Speaker Nancy Pelosi on Wednesday urged passage of at least $61 billion in new economic stimulus funding this month, but said the future of the legislation requires the cooperation of Republicans in the Senate and President Bush.
House Majority Leader Steny Hoyer told CNBC earlier in the day that "we need to act sooner than later" on a second stimulus package but didn't commit to it getting done in a lame duck congressional session, which would presumably start in mid- to late-November.
Government spending analysts say the election results now make it more likely a second fiscal stimulus package will be approved in a lame-duck session and that the cost will be closer to the high end of estimates.
"Yes, I think so, because everyone seems to be looking for help," says Tom Schatz, president of Citizens Against Government Waste, adding, "People are asking: 'Where's my bailout?'"
Hoyer used a $100 billion figure, but didn't describe what kind of support it had.
When Congress started talking about a successor to the original $168 billion stimulus package a couple months ago, the price tag was about $60 billion. It wasn't long before it was $150 billion. Then $300 billion was thrown around.
"I think it may be on the medium side," says Robert Bixby, executive director of the Concord Coalition, which advocates fiscal responsibility. "I don't like to think of $200 billion as small, but that number is realistic," partly because it is around the size ($190 billion) Sen. Obama was advocating before becoming president-elect, he said.
Obama, for one, didn't tip his hand in his victory speech. He emphasized broad themes, such as shared sacrifice and prosperity, and didn't make much of the mandate concept.
Regardless, critics and supporters alike should hope that the next fiscal stimulus package is more of a commercial success than its predecessor, lest another big-budget flop be tacked on to the ever-growing federal debt.
The hastily conceived first stimulus package quickly signed into law last February was built around tax breaks for business and tax rebates for consumers. Its impact on the economy was fleeting, at best.